The Global Rice Supply and Demand Outlook

Samarendu MohantyHead, Social Sciences Division

I t ti l Ri R h I tit tInternational Rice Research Institute

OutlineOutline

• Current happenings in the global riceCurrent happenings in the global rice market

What can we expect in the next few months?– What can we expect in the next few months?• Medium- to long-term supply and demand

situationsituation– How much we need and who will produce it?

• Concluding remarks

Crop Prices (CBOT)

Wheat Corn

50% 35%

Cotton40% Chart Source: http://futures

tradingcharts.com/

40%

Thai 5% Broken Rice Price(May 2008 to August 2010)

US$/t (fob)

(May 2008 to August 2010)

800

900

1000

500

600

700

200

300

400

100

200

May-08

Aug-08

Nov-08

Feb-09

May-09

Aug-09

Nov-09

Feb-10

May-10

Aug-10

Source of raw data: The Pinksheet, World Bank

Global Rice ProductionGlobal Rice Production480,000

000 MT

450,000

390,000

420,000

360,000

300,000

330,000

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11*00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

Data Source: PSD, USDA (Accessed on Sept. 11, 2010

Global Rice InventoryMilli T

140

160

Million Tons

Chi I di Vi t Th il d R W

100

120

140 China India Vietnam Thailand RoW

80

100

40

60

0

20

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20102000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Data Source: PSD, USDA (Accessed on Sept. 11, 2010

2010 Global Rice Production2010 Global Rice ProductionMillion Tons

460

465

470

450

455

460

440

445

430

435

Aug-2010 Sept-2010g

Source: WASDE, USDA

Pakistan Rice ProductionPakistan Rice Production7,000

000 MT

5 000

6,000

,

4,000

5,000

2,000

3,000

0

1,000

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11*00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

Data Source: PSD, USDA (Accessed on Sept. 11, 2010

Pakistan Exports in 2010/11?Pakistan Exports in 2010/11?7,000

000 MT

5 000

6,000

,

4,000

5,000

2,000

3,000

0

1,000

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/1100/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

Other Uncertainties for Standing Ri CRice Crop

• Drought and Flood in China: Expected to lower 2010 production by 5 percent

• La Niña in Southeast Asia• Droughts in India’s East and NortheastDroughts in India s East and Northeast

and floods in few northern states. – On average 3-4 million hectares of crop areaOn average 3 4 million hectares of crop area

is lost to flood annually.

Rice Price in a Consolidation Zone(Oct 08 to August 2010)

US$/t (fob)

(Oct. 08 to August 2010)

600

650

450

500

550

350

400

300 Oct-08

Dec-08

Feb-09

April-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Source of raw data: The Pinksheet, World Bank

Wheat vs Rice Prices

1000

US$/t (fob)

Wheat vs Rice Prices

700

800

900

1000

400

500

600

700

200

300

400

100  Aug‐05

 Dec‐05

 Apr‐06

 Aug‐06

 Dec‐06

 Apr‐07

 Aug‐07

 Dec‐07

 April‐08

 Aug‐08

 Dec‐08

 April‐09

 Aug‐09

 Dec‐09

Apr‐10

Aug‐10

Thai 5% HRW@GulfThai 5% HRW@Gulf

Source of raw data: The Pinksheet, World Bank and USDA

Near Term OutlookNear Term Outlook

• Some strengthening of rice pricesSome strengthening of rice prices.• Further rise in wheat prices are likely to

put additional pressure on riceput additional pressure on rice.• Dry season rice acreage may be affected

b hi h h t d tt iby higher wheat, corn and cotton prices.

Medium- to Long-Term PerspectiveMedium to Long Term Perspective

• How much we need?How much we need?• Who will produce it?

Rice Consumption vs Income180

g/yr

)

Rice Consumption vs Income

140

per c

apita

(kg

Japan

1961-2005

100

nsum

ptio

n p

Korea

60

Con

20

0 5000 10000 15000 20000 25000 30000 35000 40000

Per capita income (US$)p ( )

Per capita consumption vs. per capita GDP at 2000 US$ (1990,2000,2005)

Bangladesh

Vietnam

160

180

Bangladesh

Indonesia

Thailand120

140

apita

(kg/

yr)

ChinaI di

MalaysiaPhilippines

80

100

mpt

ion

per c

India

40

60

Ric

e co

nsu

0

20

0 500 1000 1500 2000 2500 3000 3500 4000 4500 50000 500 1000 1500 2000 2500 3000 3500 4000 4500 5000Per capita income (2000 US$)

Rice Consumption by Income GroupRice Consumption by Income Group

Per capita Monthly Rice Consumption in Vi t U b R lVietnam: Urban vs Rural

180

Kilograms

140160180

80100120

406080

020

1992 1997 2002 2004 2006

Urban Rural

SSA Per Capita Rice ConsumptionSSA Per Capita Rice ConsumptionKilograms

20

25

15

5

10

0

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010

Per Capita Rice Consumption(World-Asia-SSA)

Kilograms

16

18

20

12

14

16

8

10

4

6

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20

Data Source: USDA, FAO

Global Rice Production Increases Needed to Meet Demand by 2035y

600

Million tons milled rice

500

550Additional rice needed:116 million tons by 2035

450

500

350

400

2010 global rice production

300

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

A i Af i A i R t f W ldAsia Africa Americas Rest of World

Global Rice Supply: Area vs Yield

Percent 000 Ha

Area

Consumption Growth

Yield Growth

*These numbers are calculated based on 10‐year Moving Average

Paddy Yields (Average 05/06-08/09)y ( g )Tonnes/Ha

Asian Countries African Countries

Data Source: FAOSTAT

Breeding and management for CA systemssystems

Multi-location screening of NT-DSR

On-farm evaluation in CSISA HubsM. Mazid, NW Bangladesh Hub

R. Mugaloda & CSISA collaborators

Nutrient management decision tools for

extension workers and farmersReleased: Philippines IndonesiaPhilippines, Indonesia, Zhejiang (PRC)

Pipeline:Pipeline: BangladeshIndia (T.N., W.B.) S i L kSri LankaVietnamGuangdong (PRC)W. AfricaWheat: NW IndiaMaize: BangladeshMaize: Bangladesh

R. Buresh (IRRI), NARS and private sector collaborators

Postharvest managementQuality

Laser leveling

Quality, Water, Labor

Laser leveling Min Combine transfer

Physical loss: 12-25%Loss at market: up to 50%Farmers don’t value add Drying system

Market info

Farmers don’t value add Drying system transfer

Quality tools

Farmers’ seeds

Rice mill improvement Super bags

y

Sub-Saharan Africa RiceSub Saharan Africa Rice

Million Tons Million Tons

Data Source: USDA

Concluding Remarks• Short-Term Outlook:Short Term Outlook:

– Some strengthening of rice prices.Further rise in wheat prices are likely to put– Further rise in wheat prices are likely to put additional pressure on rice.

– High wheat corn and cotton prices should also– High wheat, corn and cotton prices should also affect the dry season rice area.

• 2020 outlook:• 2020 outlook: – Need to produce additional 57 million tons of

milled ricemilled rice.– Further area expansion is highly unlikely.

Required yield growth of 1 5% as compared to– Required yield growth of 1.5% as compared to 0.8% in the baseline.

Concluding Remarks

• 2035 outlook:– Significant decline in consumption growth

beyond 2020.• Only 50 million tons of additional rice by 2035

– Rice acreage is likely to decline.– Best bet: Yield needs to grow between 1-1.2

percent